Lower and Lower OCR

Gerald Mullaney

9 April 2025

The OCR, was again lowered today by 25 basis points, bringing the OCR to 3.50%. This indicates a slow as you go strategy taking no risks.

It is understandable that, the the reduction was not 50 basis points, as it looks like, the target for boom ahoy, 2026 on beyond is well on track.

Keeping a tight control on all things financial and keeping things on track and not allowing the market to escsalate is the strategy for this moment.

Imminent OCR Cut

Gerald Mullaney

7 April 2025

Its of the main view that, the OCR will be cut by 25 basis points on the 9 April 2025.

That view is a safe and boring take no chances view.

With the economy and now the stock market, on shaky grounds for the time being, the view may more likely be a 50 basis point cut on the 9 April 2025 currently 3.75% this would bring the OCR to 3.25% by the 9 April 2025.

Having a longer view, the netural rate as indicated by the RSBNZ could be as low as 2.50%.

Therefore there is a way to go, to get the OCR rate down, low enough to stimulate the economy.

A slower projectory is possible as the RBNZ will not want to stimulate or cause property prices to assend to higher levels.

Mid year, is the view, to a possible low in the cycle, however the trend is down.

Any thought about fixing would occur mid 2025 however inflation needs to be carefully monitored as any increase in inflation could cause the RBNZ to stop reducing and may even cause it to increase the OCR.

Therefore, keeping an eye on inflation, is critical in the next two to three months, to secure a great retail interest rate.